Perspective of the Week
“Why 50-year Mortgages are a Scam”
As you know by my name, I love dividends. And in addition to sharing on here, I write regularly in the investment platform- Seeking Alpha.
My goal there is to teach everyday investors about building wealth, so they won’t to need to work to traditional retirement age.
I want to help you take control of your life, have F.I.R.E.
Here at Dividend Collection Agency the goal is to give investors and/or readers a different perspective. We take a simple approach to building wealth. And although investing may seem easy, people often miss opportunities by over complicating it. But we are here to help.
In recent news, President Trump is proposing 50-year mortgages vs 30-year mortgages.
If this comes to fruition, this will mainly impact the lower & middle class.
Lower & middle class think longer loan terms mean better terms.
The system is designed to make you think that. Longer loan terms mean more interest paid. This only makes sense if your interest rate is near zero, which for a mortgage loan is highly unlikely.
Make no mistake. You’ll never get over on the lender. The system is designed for you to lose and them to win.
They make you focus on the monthly payment, but when the price never changes you lose.
According to Zillow, the average home in America costs $363,932. The current average interest rate on a 30-year mortgage is 6.2%
Here’s how much you’d pay in interest at the current rate:
✅ 30 years = $431,348
✅ 50 years = $1,128,210
Your interest paid nearly triples on a 50-year mortgage!
Some will say, “I’ll just refinance when rates go lower.”
Sure. And your loan terms will restart unless you switch to a 30-year or 15-year mortgage term. And your payment will almost certainly increase, meaning you’re likely to stay with your current term.
The rich & wealthy primarily invest in real estate for tax advantages.
But social media has everyday people thinking they will become real estate millionaires in a few months or years.
Invest in yourself first before looking to buy a home to build wealth or passive income.
I prefer to collect my passive income through real estate in the stock market.
Happy Investing!
If you’re looking to start investing check out our investment group over on Seeking Alpha for 2 weeks FREE. Click the Seeking Alpha link here. Click investing group, learn more, or the blue hyperlink in my bio.
For educational purposes only. I am not a financial professional. Do your own due diligence.
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